US Meat Market Update: Record Highs Amidst Trade Tensions

A monthly column by Steve Kay, publisher of US Cattle Buyers Weekly

The ongoing trade war between the US and China has significantly impacted red meat exports, with US pork facing a staggering 172 percent tariff and beef at 147 percent. Consequently, exports to China have come to a near standstill.

Ironically, despite these tariffs, the market for US grain-fed cattle remains robust. Cash live cattle prices have recently set record highs for two or possibly three consecutive weeks.

As the grilling season approaches, fed beef processors are scrambling to purchase market-ready cattle. The Five-Area fed steer price averaged US$220.97 per cwt live for the week ending May 3, up US$4.65 from the previous record of US$216.32 per cwt.

Remarkably, this figure is 19 percent higher than the same week last year, indicating a US$13.27 rise per cwt in just three weeks. Dressed prices also soared to US$349.37 per cwt, up US$7.95 from the prior week’s US$341.42 per cwt.

Both calf and feeder cattle prices have rebounded from earlier lows, contributing to the upward trend. Industry experts attribute these high prices primarily to the smallest US cattle herd since 1951, coupled with strong domestic and international demand.

US Meat Export Federation (USMEF) President and CEO Dan Halstrom emphasized that despite uncertainties, global demand for US beef remains steady. In March, beef exports totaled 109,330 metric tons, a 1 percent increase compared to last year, while export value climbed to US$922 million, marking a 4 percent upswing.

Challenges for Tyson Foods

The soaring live cattle prices are presenting significant challenges to US fed beef processors. Tyson Foods, the largest such processor in the US, reported a staggering operating loss of US$258 million in its fiscal 2025 second quarter.

This brings the total loss for the first half of the fiscal year to US$322 million, far surpassing their previous record loss of US$244 million in 2006. CEO Donnie King noted that the beef segment is grappling with the most challenging market conditions in its history.

Though beef sales rose to US$5.196 billion, a notable increase from US$4.954 billion the previous year, volume declined by 1.4 percent, primarily due to a lower number of cattle harvested.

Tyson’s operating margins have suffered, showing a negative 5 percent compared to the previous year’s negative 0.7 percent. The company attributes part of this loss to legal contingencies and network optimization charges while emphasizing ongoing healthy demand.

Brady Stewart, Tyson’s Group President, highlighted that cattle weights are at record levels, somewhat offsetting lower head counts. Despite the adversity, Tyson is managing costs and enhancing its value-added product offerings.

As Tyson navigates this tumultuous period, it’s essential to note that while packers face financial struggles, they previously enjoyed substantial profits before and during the COVID-19 pandemic.

In the five years from 2018 to 2022, Tyson Beef posted an impressive operating income of US$10.232 billion, indicating a significant fluctuation in the beef processing business.